A Little Flatter On Wednesday

T-Notes open a little below their late NY levels to last trade +0-02 at 134-06+.

• To recap, Wednesday provided some twist flattening of the curve, with yields out to 10s little changed and 20+-Year paper richening by ~2.0bp. Yields backed away from session highs as the minutes from the latest FOMC meeting were released.
• The Minutes revealed that participants "generally judged that the Committee's standard of "substantial further progress" toward the maximum-employment and inflation goals had not yet been met, particularly with respect to labor market conditions, and that risks to the economic outlook remained."
• On tapering, "various participants commented that economic and financial conditions would likely warrant a reduction in coming months. Several others indicated, however, that a reduction in the pace of asset purchases was more likely to become appropriate early next year," with the more hesitant looking to uncertainty/worries surrounding the labour market and inflation.
• All in all, the minutes did little to dispel the idea of a taper announcement in Q421, but some of the caution evident and the required time re: communication may skew the perception of chances surrounding such an announcement towards the end of the year.
• Elsewhere, 20-Year Tsy supply stopped on the screws, with the cover ratio nudging above the recent averages as dealer takedown ticked further below its own recent averages.
• The latest monthly Australian labour market report headlines during Asia-Pac hours. Looking to Thursday's U.S. docket, weekly claims data, the latest Philly Fed survey and 30-Year TIPS supply will be eyed.